At the risk of testing my readers beyond endurance, a relatively short blog is now followed by a very long one. However, this blog could be of help to those minded to contribute to the debate on the Housing and Planning Bill that will conclude at the beginning of December. Feel free to cannibalize these submissions in any way that you feel could persuade the Parliament to concentrate on passing legislation that will help in the provision of the right number, of the right type of genuinely affordable homes.
Housing and Planning
Bill 2015
I am a land use
planner with over 40 years experience of working in public, private and
voluntary sectors. I have also provided training in planning to property
lawyers and taught planning at Oxford University Department of Continuing
Education as well as offering private classes.
I make regular contributions to the trade magazines and newspapers and
maintain a blog at www.dantheplan.blogspot.com. If I have particular expertise it is in the
legal basis for planning preparation and implementation. I have also been
heavily involved in the current discussions about self-building and co-housing.
1 Introduction
1.01 Government will be aware that the planning
system is extremely hierarchical; with powers delegated to LPAs but under
supervision by the Communities Secretary/Inspectorate primarily through the
examination of development plans and conducting appeals against refusals of
permission. Although those working with
the planning system are generally hoping for a period during which there will
be no significant (or even minor changes) for them to learn, understand,
communicate and implement, the Communities Secretary does have extraordinary
power to bring about positive change through what he says and how Inspectors
are briefed. Many if not most changes are based on a misunderstanding of how
the system could or should work and are often responsible for making things worse
rather than better. Government then blames the ‘system’ for these failings and
introduces further misjudged changes. Ministers seem incapable of taking or
acting on a holistic or systemic view of the existing controls in respect of environmental
management.
1.02 The recent successful challenge of West Berks and Reading BC (currently
subject to an appeal) to a written ministerial statement which was found to be
incompatible with the existing statutory scheme, should be taken as a lesson
for Government (and its Ministers) to be sparing with its interventions and
ensure that changes are carried out through due process and are compatible with
the system as formally established. This
Bill is intended to change the statutory regime and, unlike policy statements,
will be harder to correct, will imply legal remedies for failures to carry out
duties, and should be the subject of even greater scrutiny to ensure that the
changes will bring about the intended improvements to the system and do not
just add to the existing confusion and have unfortunate and unintended
consequences (see the Judge’s findings in
West Berks and Reading BC).
1.03 My first point is that the sections of the
Bill addressed below suggest that it has been drafted without adequate
understanding of the systemic nature of housing and planning in order to
achieve the intended aims and, consequently, it is relatively easy to identify more
appropriate ways to improve the existing system(s), mostly based on coherent
policies and not legislative change.
1.04 The second fundamental point is that it is
extremely unlikely that sufficient housing could be provided of the right
quality (inc energy efficiency), of the right size, in the right places and at
genuinely affordable prices until the enhanced value of the land being
developed is captured for the benefit of both the new and existing residents
and businesses that were responsible for creating all the excess above existing
use value. That is, the suitability and attractiveness of the location depends
substantially on the quality and adequacy of the infrastructure. The current failure to capture development
land value (eg < 200x existing use values) benefits a few hundreds of
landowners and disadvantages everybody else. There does not appear to be any
electoral disadvantage to capturing development land value (see 2014 report by
some Michael Lyons).
1.05 Although a Government that finally
understands the necessity of capturing the development land value (see the 1947
Act!) might think that legislation is required (eg a further section to the
Bill), again, the Communities Secretary could achieve this through a clear
statement about what ‘necessary infrastructure’ implies. New development should not be permitted which
does not provide for all the infrastructure (including the genuinely affordable
housing for all the workers which contribute to the local economy and living
conditions – teachers, nurses, planners, cleaners, police, road maintenance
etc) and put an end to the freeloading that currently characterizes new
development. Describing housing as
‘infrastructure’; is consistent with its recent proposed inclusion in large
infrastructure projects. The reasons viability assessments have been required
and affordable housing provision has been squeezed are because of inflated land
costs. The development industry (those that have not gambled/landbanked at
inflated prices), as opposed to landowners, would welcome a substantial
reduction in development land values.
1.06 The Government should commission research on
the extent to which demand-side initiatives (Help to Buy, Funding for Lending,
other discounted purchase schemes inc equity sharing added to Housing Benefit)
have contributed to excessive house prices. Such research is essential to
understanding whether further such initiatives would be desirable, necessary or
counter-productive in the endeavour to provide genuinely affordable housing.
Comments
2. Part 1: New
Homes in England
o Starter
Homes
2.01 A systemic view of planning and housing
would suggest that this new category (ie 20% discount, <£250k or £450k, for
under 40s and refunds up to 5 years) would create a number of false and
unhelpful thresholds each of which causes difficulty, distortions and, in
implementation, many ‘hard cases’. If the perceived problem is a shortage of
small dwellings for sale to young people at prices they can afford there are a
number of policies that should be
introduced by the Communities Secretary to be included in all development plans
(local plans and neighbourhood plans) as supervised by the inspectorate. Small dwellings are urgently required to
balance the size of households and houses throughout the country. There is a
particular need to provide attractive options for the 8 million households
looking to downsize (see APPG on Housing and the Elderly) and release larger
dwellings into the market or back to the registered provider. This would be and
obvious systemic approach to meeting the National scarcity of appropriate
housing. The current level of under occupation, including empty dwellings,
amounts to about 25m spare bedrooms which represent the equivalent of over 10m
new small houses. This would be the equivalent of 40 year’s supply – added to
the large number of new small dwellings that are needed to trigger this
virtuous circle.
- New developments should be
predominantly 2 bedroomed,
- All
larger dwellings should be designed to be easily and cheaply subdivided which
no further permission should be required (this permitted development right that
should apply to large existing dwellings would require secondary legislation).
- Permission
should be required for all extensions in order to maintain the housing mix of
homes in ‘lifetime neighbourhoods’ (the appropriate model rather than lifetime
homes), and to maintain the energy efficiency achieved by the original. The
Communities Secretary needs to encourage the inclusion of these policies in
development plans.
2.02 If
“starter homes" are to be provided on discrete sites or part of larger
developments there is no good reason why these should substitute for houses at
genuinely affordable rent. Neither is it reasonable to expect all other new and
existing developments to pay for the necessary infrastructure.
o Self-build and custom house-building
2.03 It has become
obvious that the housing market is dysfunctional in a number of ways that are not
apparent abroad. One of the unfavourable comparisons is the relatively small scale
of self/custom-building which is taking place in this country. It is encouraging
to see that this is a matter which is being addressed, but it is
incomprehensible that this is through legislation and not changes or additions
to Government policy (ie a Ministerial statement to explain para 50 of the
NPPF).
2.04. A consensus
seems to have built around the prospect of the larger building companies
providing no more new houses than 150,000 per year. Even this scale building will depend on the
number of people being able to afford to buy housing at the inflated prices
largely caused by unjustified land values and adjusted to the artificially high
(i.e. the price unrelated to the actual cost of building) house prices in the
local area. A similar consensus seems to
have identified a need for nearly double that number. Whilst the Government is
hoping to see a revival of small building companies, the extra 100,000
dwellings will need a step-change in the process of housing delivery.
2.05 Whilst the
proposed Registers of self and group-builders would be important components of
the required growth in this sector, the expectation that councils would find
adequate and suitable serviced sites is completely unrealistic. The Bill should make it clear that councils
will be expecting a proportion of all sites above 5 dwellings to reserve at
least 20% of the plots on all sites (and provide services) for potential self/group-building.
Some relatively constrained urban areas will need to be able to commission
serviced plots on developments in neighbouring authorities to meet demand
expressed through their registers.
2.06 This country also
compares unfavourably with most of those in Europe (and the US) in the dearth
of opportunities to co-house. The Bill
should clarify that the ‘associations of individuals’ to be helped in finding
serviced plots should also be assisted in the provision of the facilities
associated with co-housing, including common house, guest accommodation and
workspaces. Planning authorities should
be required to keep registers of potential co-housers.
2.07 Whilst it might
be unreasonable to exempt self-building and co-housing from making
contributions to necessary infrastructure, as such exemptions to apply to
social housing, it would be eminently sensible to include self-building and co-housing
within the category of “affordable housing" (already exempt contributions) given that
this form of housing can be provided at substantial discounts. Whether the promotion of self-building and
co-housing is carried out through policy pronouncements (preferable) or through
this Bill, it will be important to have very clear definitions of each so that
any preferential treatment and discounts are properly justified. Self-building is a more secure means of
securing supply as it does not depend on the developer model of drip feeding
into a market so as to avoid depressing process.
3.
Rented Housing
o Private rented sector
3.01 This is the growth sector of the housing
market principally due to the growth of buy to let. This sector includes a significant number of
the 40% of dwellings which were sold to occupiers under previous 'right to buy’
provisions. As this sector is very likely to continue to make a very
significant contribution to housing supply, the conditions applicable to
private renters deserve to be given very close attention. As drafted, the Bill is a missed opportunity
to balance out the advantages of renting with those of buying. The prospect of “fair rents" or “rent
controls" is always met with objections based on the possibility that
properties will be removed from the private rental market. Whilst this might have
happened in the past, there is no reason why this should be the case in the
current set of circumstances. Much would depend on the level of rents and the
nature of the controls. The former should be based on average income levels and
the latter to some appropriate form of index linking. If landlords decided to take their properties out of the
rental market and put them up for sale then this might be a desirable outcome,
especially if this increased supply at reduced local prices. These properties
could also be bought by Registered Providers.
4.
Social housing in England
o Right to acquire – extending Right to Buy discount
levels to housing association tenants
4.01 Given that 40% of dwellings previously sold
at a discount now in the private rental sector the Government should be required
provide the evidence which shows that
the overall increase in owner occupation implied by this new provision can be
maintained. In fact, it is likely that the economic situation/employment
conditions would never support more than about 60% level of owner occupation.
The precarious nature of current employment would also suggest that this level
might even fall further and attempts to raise this back towards 70% are likely
to be futile and do nothing more than add to the housing bubble.
4.02 The Government appears to have very limited
understanding of the social rental sector. Seeking to control the rents and
interfering with their sales can have significant impacts on the financial
models of Registered Providers on which their
operations and flourishing depend.
It is quite possible that some Registered Providers are abusing their
position and should be the subject of some in-depth investigation backed up by
some enforcement powers. However, these are most likely to be required to
address some relatively minor matters such as executive pay and not those which
compromise the valuable contribution that they are making in the provision of
affordable housing. Registered Providers
could also be encouraged (within the Bill if necessary) to contribute to the
provision of opportunities for self/group-building and co-housing.
4.03 Whilst this provision should preferably be
excluded from the legislation, Registered Providers could be encouraged to sell
properties where this is appropriate to the adjustment or restructuring of
their stock. A discount on market prices could be reasonable if it reflected the
benefit that might accrue to the Registered Provider.
o Vacant high value local authority housing – requiring
local authorities to manage their housing assets more efficiently, with the
most expensive vacant properties sold and replaced with new affordable housing
in the area
4.04 The attempt to link the sale of houses by
Registered Providers to be replaced by funds accrued from the sale of
high-value local authority housing is both clumsy and counter-productive. If Registered Providers are required to sell
at a discount, they should simply be compensated out of public funds to replace
their stock. Local authorities should
not be required to sell properties where a relatively desirable location
happens to have contributed to inflated prices. Local authority housing has a
utility value in such locations that should be fully respected and protected.
o High income social tenants – requiring tenants in
social housing on higher incomes (over £40,000 in London and over £30,000
outside London) to pay market rate, or near market rate, rents
4.05 Whilst there
may be some relatively fortunate tenants who are finding their housing costs to be
relatively affordable, these are very few in number and of little consequence
compared to the extremely large number of owner occupiers in a similar situation,
often without any mortgage liability or payments. The proposed regulation would
require close and intrusive monitoring of earnings that would be extremely
difficult to operate to relatively little advantage. In contrast, a regulation
that encouraged downsizing by owner occupiers associated with a deliberate
increase in appropriate housing choice, would have a very great social benefit
in terms of the efficient use of the housing stock. In fact, such measures
could increase the supply of housing at a far greater rate than the building of
houses (often on greenfield if not Green belt land).
5. Planning
Part 6: Planning in England
o Neighbourhood planning – simplifying and speeding up
the neighbourhood planning process to support communities that seek to meet
local housing and other development needs through neighbourhood planning
5.01 This is another example of tinkering that
almost always does more harm than good.
Neighbourhood plans have the status of “development plans" and
must, therefore, go through proper scrutiny and due process to avoid injustices
(avoid legal challenges) and secure their community benefits.
o Local planning – giving the Secretary of State further
powers to intervene if Local Plans are not effectively delivered
5.02 Local planning authorities might appear to
be their own worst enemies in the extraordinary delays that have occurred in
the production development plans. However, central government should have much greater
awareness of the delays that have been caused by their tinkering with the
development plan system. It is inconceivable that local plans could be properly
and fairly prepared through central intervention.
o Local registers of land and permission in principle –
creating a duty for local authorities to hold a register of various types of
land, with the intention of creating a register of brownfield land to
facilitate unlocking land to build new homes; and giving housing sites
identified in the brownfield register, local and neighbourhood plans planning
permission in principle, and providing an opportunity for applicants to obtain
permission in principle for small scale housing sites
5.03 The system of controlling development
through the grant of outline and full permissions with provisions for the
submission of reserved matters is entirely satisfactory, sensible and
functional. The system also has the advantage of having been fully and rigorously
tested through the supervision of the courts. It is also a system with which
both public and private sectors are reasonably familiar. There is absolutely no
reason to believe that the changes now being proposed would have any advantages
in releasing suitable housing land any faster than the existing system operating
with the appropriate encouragement of the Communities Secretary.
5.04 Very substantial and compelling evidence
should be required before a change of this nature is introduced. In the absence
of significant beneficial effects it is unjustifiable to impose such changes on
already under resourced planning departments and overworked courts.
o Planning permission etc – levelling up the power which
enables conditions to be attached to development orders for physical works so
that they are consistent with those for change of use; extending the planning
performance regime to apply to smaller applications; and putting the economic
benefits of proposals for development before local authority planning
committees
5.05 Economic benefits of development
are already material considerations taken into account in deciding planning
applications. The performance of planning authorities should not be a matter for
legislation. Generally, this form of tinkering is almost invariably
counter-productive.
o Nationally significant infrastructure projects –
allowing developers who wish to include housing within major infrastructure
projects to apply for consent under the nationally significant infrastructure
planning regime
5.06 It is possible to argue that housing
affordable to local people and key workers is part of necessary infrastructure.
However, this could be achieved through a ministerial statement rather than a
change to the law in respect of the infrastructure planning regime.
6. Summary
6.01 Most if not all of the provisions of the
Bill discussed above are examples of a government's failure to understand the
systemic nature of the planning and housing system and the very effective role
that can be played by the relevant Ministers.
It is likely that the Communities Secretary and Planning and Housing
Minister have a greater knowledge of these systems than the Treasury which
seems to be the main driver of change.
6.02 The very contentious and legalistic nature
of the planning system requires long periods of stability to operate in a fair
and effective manner. Perceived failures to achieve government objectives
should be addressed by the Ministers in ways consistent with the existing
statutory regime and the National Planning Policy framework.
6.03 Priority should be given to supply-side
policies that would provide a better balance between the size of housing and
households that is a much fairer and more efficient way of meeting housing
needs.
6.04 Although it would be a relatively simple
matter for the relevant ministers to expedite the desirable growth in
self/group-building and co-housing (see NPPF para 50), if there must be
legislation, it should include detailed definitions (eg incorporating this kind
of housing into quotas of “affordable housing") and place obligations on
planning authorities and developers to reserve appropriate land on allocated
and permitted sites.
